MINCOME: An end to the perpetual welfare trap?

Bringing back a discarded government program could save taxpayers millions in health-care and bureaucracy costs and dramatically shrink poverty, just as it did in Dauphin almost 40 years ago. The problem is, even the province’s left-leaning NDP government likely doesn’t have the political will to use it.

That was the feeling Tuesday at a standing-room-only lecture about a hot public-policy idea — a guaranteed annual income that would replace welfare.
It’s an idea with roots in Manitoba. Nearly 40 years ago, Dauphin was the site of an experiment on the effects of a guaranteed income. Every low-income person in town, including the working poor and people not eligible for welfare, got a top-up to ensure a basic level of income […]

The experiment was meant mostly to study the effect of a guaranteed annual income on the labour market. If you give people money and don’t make them work, will everyone quit their job? The answer was no, followup research by University of Manitoba economics professor Wayne Simpson found. Adults didn’t stop working full time, but married women stayed home longer after having children and teens waited a little longer before getting full-time jobs.
What was the effect?

A few years ago, University of Manitoba community health Prof. Evelyn Forget used reams of data to test the health and social impacts of Mincome. She found huge spikes in Grade 12 enrolment during the years Dauphin was part of Mincome. There were more kids in Grade 12 in 1977 than there were in Grade 11 the year before, meaning dropouts returned to school.

Hospitalization rates dropped 8.5 per cent, especially for accidents and injuries, since poor people often work more dangerous jobs and are more susceptible to violence, including family violence. Folks in Dauphin also ended up in hospital far less often because of mental-health problems. That could have a huge impact on Canada’s ballooning health-care budgets, including $50 billion spent on hospitals. But, “when the money stopped flowing, the effects started to disappear,” said Forget.

And, people in Dauphin also had fewer babies — the drop in birth rates was higher than the continent saw through the mid-1970s.